"1. A cost system determines the cost of a cost object by: (Points : 4) accumulating and then assigning costs accumulating costs assigning and then accumulating costs assigning costs 2. At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually: (Points : 4) are considered a variable cost are considered a fixed cost depend on the scheduling of floor depend on the scheduling of production runs 3. The breakeven point is the activity level where: (Points : 4) revenues equal fixed costs revenues equal variable costs contribution margin equals variable costs revenues equal the sum of variable and fixed costs 4. How many units would have to be sold to yield a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20? (Points : 4) 4,800 units 4,400 units 4,000 units 3,600 units 5. With traditional costing systems, products manufactured in small batches and in small annual volumes may be ________ because batch-related and product-sustaining costs are assigned using unit-related drivers. (Points : 4) overcosted fairly costed undercosted ignored 6. Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 22 8 375 Deluxe 28 12 225 Overhead costs $20,000 $40,000 Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the deluxe model? (Points : 4) $24,800 $35,200 $37,500 $22,500 7. Which of the following statements about normal costing is TRUE? (Points : 4) Direct costs and indirect costs are traced using an actual rate. Direct costs and indirect costs are traced using budgeted rates. Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate. Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate 8. One reason indirect costs may be overapplied is because: (Points : 4) the actual allocation base quantity exceeds the budgeted quantity budgeted indirect costs exceed actual indirect costs requisitioned direct materials exceed budgeted material costs Both A and B are correct. 9. Activity-based budgeting would separately estimate: (Points : 4) the cost of overhead for a department a plant-wide cost-driver rate the cost of a setup activity All of these answers are correct. 10. Activity-based budgeting does NOT require: (Points : 4) knowledge of the organization's activities specialized expertise in financial management and control knowledge about how activities affect costs the ability to see how the organization's different activities fit together 11. The following items are the same for the flexible budget and the master budget EXCEPT the same: (Points : 4) variable cost per unit total fixed costs units sold sales price per unit 12. An unfavorable flexible-budget variance for variable costs may be the result of: (Points : 4) using more input quantities than were budgeted paying higher prices for inputs than were budgeted selling output at a higher selling price than budgeted Both A and B are correct. 13. The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance. (Points : 4) the same as; the same as the same as; differently than differently than; the same as differently than; differently than 14. A favorable fixed overhead spending variance might indicate that: (Points : 4) more capacity was used than planned the denominator level was less than planned the fixed overhead cost-allocation base was not used efficiently a plant expansion did not proceed as originally planned 15. Learning curve effects can be incorporated: (Points : 4) into performance evaluations into production schedules when using costs to price products All of these answers are correct. 16. The learning-curve models presented in the text examine: (Points : 4) how quality increases over time how efficiency increases as more units are produced how setup costs decline as more workers are added the change in variable costs when quantity discounts are available 17. When deciding whether to discontinue a segment of a business, relevant costs include all of the following EXCEPT: (Points : 4) fixed supervision costs that can be eliminated variable marketing costs per unit of product sold cost of goods sold future administrative costs that will continue 18. Discontinuing unprofitable products will increase profitability: (Points : 4) if the resources no longer required by the discontinued product can be if capacity constraints are adjusted automatically when a large portion of the fixed costs are unavoidable 19. The markup percentage is usually higher if the cost base used is: (Points : 4) the full cost of the product the variable cost of the product variable manufacturing costs total manufacturing costs 20. Which of the following statements is FALSE regarding cost-plus pricing? (Points : 4) A company selects a cost base that it regards as reliable. A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment. The selling price computed is only a prospective price. The cost-plus price chosen has already been studied for customer reaction to the price. 21. balanced scorecard measures an organization's performance from all of the following perspectives EXCEPT: (Points : 4) financial government customer learning and growth 22. The purpose of the balanced scorecard is BEST described as helping an organization: (Points : 4) develop customer relations mobilize employee skills for continuous improvements in processing capabilities, quality, and response times introduce innovative products and services desired by target customers translate an organization's mission and strategy into a set of performance measures that help to implement the strategy 23. Costs which are not economically feasible to trace but which are related to a cost object are known as: (Points : 4) fixed costs direct costs indirect costs variable costs 24. ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool. (Points : 4) cost hierarchy cost pool cost allocation cost driver 25. The dual-rate cost-allocation method classifies costs in each cost pool into a: (Points : 4) budgeted-cost pool and an actual-cost pool variable-cost pool and a fixed-cost pool used-capacity-cost pool and a practical-capacity-cost pool direct-cost pool and a reciprocal-cost pool 26. When using the single-rate method, fixed cost allocation may be based on: (Points : 4) actual usage budgeted usage incremental cost allocation Either A or B are correct. 27. Which method of accounting recognizes byproducts in the financial statements at the time their production is completed? (Points : 4) production allocation method sale method production method None of these answers is correct. 28. Which statement is NOT true regarding the sales method of accounting for byproducts. (Points : 4) the method makes no journal entries until the byproduct is sold this method is the preferred method because of the matching principle revenues of the byproduct can be recorded in the income statement as revenue revenues of the byproduct can be recorded as a reduction of cost of goods sold in the income statement 29. Which one of the following statements is true? (Points : 4) In a job-costing system, individual jobs use different quantities of production resources. In a process-costing system each unit uses approximately the same amount of resources. An averaging process is used to calculate unit costs in a job-costing system. Both A and B are correct. 30. Which of the following statement(s) concerning conversion costs is correct? (Points : 4) Estimating the degree of completion of direct materials in a partially completed unit is usually easier to calculate than estimating the degree of completion for conversion costs. The calculation of equivalent units is relatively easy for the textile industry. Estimates are usually not considered acceptable. Both B and C are correct. 31. A liability claim is an example of: (Points : 4) prevention costs appraisal costs internal failure costs external failure costs 32. Design engineering is an example of: (Points : 4) prevention costs appraisal costs internal failure costs external failure costs 33. Relevant total costs in the economic-order-quantity decision model equal relevant ordering costs plus relevant: (Points : 4) carrying costs stockout costs quality costs purchasing cost 34. Which of the following statements about the economic-order-quantity decision model is FALSE? (Points : 4) It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered. It assumes quality costs are irrelevant if quality is unaffected by the number of units purchased. It assumes stockout costs are irrelevant if no stockouts occur. It assumes ordering costs and carrying costs are relevant. 35. The stage of the capital budgeting process in which a firm obtains funding for the project is the: (Points : 4) make decisions by choosing among alternatives stage. make predictions stage. obtain information stage. implement the decision, evaluate performance, and learn stage. 36. Which capital budgeting technique(s) measure all expected future cash inflows and outflows as if they occurred at a single point in time? (Points : 4) net present value internal rate of return payback Both A and B are correct. 37. Transfer prices should be judged by whether they promote: (Points : 4) goal congruence. the balanced scorecard method. a high level of subunit autonomy in decision making. Both A and C are correct. 38. A transfer-pricing method leads to goal congruence when managers: (Points : 4) always act in their own best interest act in their own best interest and the decision is in the long-term best interest of the manager's subunit act in their own best interest and the decision is in the long-term best interest of the company act in their own best interest and the decision is in the short-term best interest of the company 39. Thacker Company has two regional offices. The data for each are as follows: Maryland New York Revenues $ 580,000 $ 596,000 Operating assets 4,800,000 9,000,000 Net operating income 2,016,000 4,860,000 What is the return on investment for the New York Division? (Points : 4) 0.42 0.54 0.96 4.12 40. During the past twelve months, the Zenith Corporation had a net income of $39,200. What is the return on investment if the amount of the investment is $280,000? (Points : 4) 10% 12% 14% 16%,I received a 13/40 from your answers. I also remember paying you $60 for this as well. Could you please elaborate on why and how this happened?
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